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Goodwill and Other Intangible Assets
 3 Months Ended
Sep. 01, 2012
Goodwill and Other Intangible Assets [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is initially recorded based on the premium paid for acquisitions and is subsequently tested for impairment. We test goodwill for impairment annually and whenever events or circumstances indicates an impairment may be occurred, such as a significant adverse change in the business climate, loss of key personnel, or a decision to sell or dispose of a reporting unit. As of September 1, 2012, our goodwill balance was $1.3 million and represents the premium we paid for Powerlink during our second quarter of fiscal 2012, adjusted for foreign currency translation.

During the fourth quarter of each fiscal year, our goodwill balances are reviewed for impairment using the last day of our third quarter as the measurement date. In accordance with ASC 350, if indicators of impairment are deemed to be present, we would perform an interim impairment test and any resulting impairment loss would be charged to expense in the period identified.

During the fourth quarter of fiscal 2012, we adopted ASU 2011-08, which allows a company the option to perform a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of an operating segment. We applied this qualitative approach to our EDG operating segment and concluded that indications of impairment were not present as of June 2, 2012. The qualitative factors considered included macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant entity or reporting until specific events.

Changes in the carrying value of goodwill are as follows (in thousands):

 

         
    Goodwill  

Balance at June 2, 2012

   $  1,261  

Foreign currency translation

     76  
   

 

 

  

Balance at September 1, 2012

   $ 1,337  
   

 

 

  

Intangible assets are initially recorded at their fair market values determined on quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized on a straight-line basis over their useful lives.

Our intangible asset represents the fair value for customer relationships acquired in connection with the acquisition of Powerlink during the second quarter of our fiscal year 2012.

Intangible assets subject to amortization as well as amortization expense are as follows (in thousands):

 

                 
    Intangible Assets Subject  to
Amortization as of		  
    Sept 1, 2012     June 2, 2012  

Gross Amounts:

                

Customer Relationship

   $ 335     $ 363  

Foreign currency translation

     (9 )      —    
   

 

 

    

 

 

  

Total Gross Amounts

   $ 326     $ 363  
   

 

 

    

 

 

  

Accumulated Amortization:

                

Customer Relationship

   $ 48     $ 8  
   

 

 

    

 

 

  

Total Accumulated Amortization

   $ 48     $ 8  
   

 

 

    

 

 

  

 

The amortization expense associated with the intangible assets subject to amortization for the next five years is presented in the following table (in thousands) :

 

         

Fiscal Year

   Amortization
Expense		  
Remaining fiscal 2013   $ 32  
2014   $ 37  
2015   $ 32  
2016   $ 27  
2017   $ 18  
Thereafter   $ 141  

The weighted average number of years of amortization expense remaining is 13.62.